Photo by Nick Fewings on Unsplash One of the outcomes of an audit is that the Internal Revenue Service finds no reason to demand changes to a return. That's obviously a welcome result. None of us want to end up paying Uncle Sam more taxes, plus penalty and interest charges. But there's still is a cost. We've likely paid a tax professional to help us through the process. And as the old credit card ad says, our time is priceless. Some audits end up OK for filers: The generally good news, according to the Aug. 4 Kiplinger Tax Letter, is... Read more →
Photo by krakenimages on Unsplash Are you freaking out about the possibility that one of the new Internal Revenue Service enforcement agents will be coming for you? Most of us don't have to worry. The prime targets are the very wealthy. Why has the IRS been instructed to go after this filing demographic? One reason is because the richest taxpayers who try to hide taxable assets offer the biggest return when they are caught. Another reason is that they've been flying under the IRS audit radar for way too long. Dramatic drop in high wealth audits: A Government Accountability Office... Read more →
CT and NJ shoppers get sales tax relief on classroom clothing and, in the Garden State, more at the end of this month. And then there were five. That's how many states remain in the August back-to-school tax holiday list. Three of them — in Illinois, Maryland, and Massachusetts — are this weekend. The other two, in Connecticut and New Jersey, will close out this month. Since most of the 19 states offering tax holidays this year have by now held their no-tax shopping events, all y'all know the drill. The table below has specific dates and links with tax-free... Read more →
Tax legislation is much more than just changes to the Internal Revenue Code. It's also a political statement. In an election year, which is essentially every year nowadays, it's also a political weapon. Republicans, who currently are slightly outnumbered on Capitol Hill by Democrats, didn't waste any time latching on to the Senate's passage on Aug. 7 of the Inflation Reduction Act. Notably, they cited potential added Internal Revenue Service scrutiny of taxpayers, thanks to part of the bill. Well aware that every federal return filer, even the most honest among us, worries about the IRS taking a closer look... Read more →
St Louis, Missouri, residents are rescued from flood waters that swamped the city after record rainfall in late July. (Photo: West County EMS and Fire) Severe storms brought flooding rains to parts of eastern Missouri before moving into Kentucky. But Bluegrass State residents got Federal Emergency Management Agency (FEMA) and Internal Revenue Service attention first, with that relief granted last week. But now, some Show Me State storm victims also are getting federal assistance, including some easing of certain tax filing and payment deadlines. The IRS today (Aug. 10) announced that Missouri individuals and businesses in the City of St.... Read more →
The Internal Revenue Service relies on taxpayers and tax professionals to help ensure that our national tax system is secure. These efforts are particularly critical as the federal tax agency goes more electronic. It's also a legal requirement for tax professionals. The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act after the names of its primary Congressional sponsors, mandates that financial institution companies ensure the security and confidentiality of any and all consumer information they collect. The Federal Trade Commission administers the law. Tax professional tax preparers are included in the law's definition of financial institutions.... Read more →
Robert J. Brockman speaking at the dedication of Centre College's Young Hall on in October 2011. (YouTube screenshot) The Texas billionaire charged in what Internal Revenue Service investigators called the largest U.S. tax fraud case ever died late Aug. 5 at his Houston home. The 81-year-old Robert J. Brockman suffered from Parkinson’s disease and dementia. In May, a federal judge deemed the former CEO of Reynolds & Reynolds, a software company for auto dealerships, was competent to face charges that he evaded taxes on $2 billion of income. A February 2023 trial date was set. So what happens now to... Read more →
Shakira and Spanish singing star Alejandro Sanz in 2008 met Spain's then-king Juan Carlos I. Today, Shakira's interactions with Spanish tax officials are not so friendly. (Photo by Movimiento ALAS - Flickr: ALAS_CUMBRE_64, CC BY 2.0) The rich and famous are different from you and me. But when it comes to taxes, sometimes they're the same. That's the case where they face the legal ramifications of some questionable tax moves they (or, usually their financial advisers) made. In fact, celebrities are seen by some tax officials as easy examples of the consequences of tax evasion. That's apparently the case with... Read more →
Some on Capitol Hill want to make it easier for you to use your Bitcoin and other cryptocurrencies to make small, every day purchases. The 2022 election year legislative calendar might be working against them, but Congressional fans of cryptocurrency still are looking at ways to make it more appealing to mass consumers. On July 26, two Senate Banking Committee members, including the committee's top Republican, introduced the Virtual Currency Tax Fairness Act. The bill, cosponsored by Ranking Member Sen. Pat Toomey (R-Pennsylvania) and Sen. Kyrsten Sinema (D-Arizona) would, in part, make small personal virtual currency transactions for goods and... Read more →
Photo by Daniel X. O'Neil via Flickr CC With things more or less back to whatever now counts as normal, kids (and parents) are counting down the days until school restarts. They're also looking, especially with inflation bumping up prices, for ways to save on necessary school supplies, which a recent National Retail Federation (NRF) survey found are expected to be around $864 this year. Sixteen states are offering ways to help their back-to-school shoppers. They're offering state (and in some cases local) sales tax holidays in August. Florida's two-week back-to-school tax holiday began July 25 and continues through midnight... Read more →
A Kentucky National Guardsman views flood damage in the southeastern part of the state on July 29 from a Blackhawk helicopter as the Bluegrass State unit flies in to provide help. (U.S. Army National Guard Photo by Sgt. Jesse Elbouab via Flickr) Historic flooding ravaged southeastern Kentucky last week, destroying homes and killing at least 37 people. Tens of thousands who were spared the worst of the overwhelming water damage are coping with power losses. Now some of those folks are getting from help from the federal government. President Joe Biden declared the most severely hit parts of the Bluegrass... Read more →
Photo by Vlada Karpovich Immediately after the U.S. Supreme Court overturn the constitutional right to abortion, talk turned to the longer-term ramifications of the Dobbs v. Jackson Women's Health Organization ruling. The ending of the 49-year-old federal right to an abortion means states now can determine under what circumstances the medical procedure is allowed. Most that have enacted anti-abortion laws or reinstated pre-Roe statutes do not allow or severely limit the time frame in which it can be performed. Some even have granted an unborn fetus personhood, or have introduced legislation to ban abortion by establishing fetal personhood, according to... Read more →
Photo by Mikhail Nilov Just when you thought it was safe to go to your mailbox, the tax bogeyman is back. The Internal Revenue Service says it has — again — sent out some confusing, and potentially incorrect tax notices. This time it's balance due notices. This is getting to be a bad habit. Earlier this year, taxpayers who had filed and paid taxes while the IRS was operating under COVID-19 pandemic constraints received automatically issued notices that the IRS couldn't find their 1040 forms. The problem then was due to the millions of backlogged paper returns that stacked up... Read more →
Summer's winding down, with schools opening their doors across much of the country in just a few weeks. So of course, you're thinking of one last getaway to escape the sweltering dog days. But before you head out to a beach retreat or cooler mountain cabin, take a few minutes for taxes. August is a good time to make some tax moves that could save you some dollars and future headaches. Here are four to consider. 1. Make your tax holiday shopping list: The return this fall of students to classrooms is most welcome by COVID-weary parents who saw much... Read more →
Photo by David Boeke via Flickr Democratic leaders in the Senate are still aiming to vote next week on the Build Back Better bill rewrite by Senate Majority Leader Charles Schumer of New York and his intraparty frenemy Sen. Joe Manchin of West Virginia. UPDATE, Sunday, Aug. 7, 2022: The Senate approved the Inflation Reduction Act of 2022 today along a 50-51 party-line vote, with Vice President Kamala Harris casting the deciding vote. The House is expected to consider the measure on Friday, Aug. 12. The 725 revised pages of H.R. 5376, now dubbed the Inflation Reduction Act of 2022,... Read more →
Geralt via Pixabay Economists use a variety of measurements to track inflation, but the one that matters most to you and me is the personal consumption expenditure, or PCE, price index. This gauge of consumer spending increased 1.1 percent in June. The difficulty many folks are having in meeting their rising living expenses finally prompted some Congressional action. The Senate is expected to vote next week on what's been dubbed the Inflation Reduction Act of 2022, a budget reconciliation package that includes tax, climate change mitigation, and health care provisions. But closer to home, 16 state governments are taking more... Read more →
More of my Austin, Texas, neighbors could be driving (and recharging) electric vehicles if the recently agreed-upon economic bill makes it into law. (Photo by Kay Bell) As the tax world frantically thumbs through the Democrats 725-page economic plan, one thing is clear. Makers of electric vehicles and the folks who want to buy them are winners. The Inflation Reduction Act of 2022, the catchy (OK, as far as political monikers are concerned) new name for the measure that salvages some of President Joe Biden's retooled Build Back Better proposals, was worked out this week by Senate Majority Leader Chuck... Read more →
Massachusetts residents are well aware of their state's Taxachusetts nickname. But some excessive Bay State revenue soon could be coming back to them. The state's department of revenue last fiscal year collected much more than expected. In April alone, which is when the state's federally-aligned Tax Day arrives, it received $2+ billion more than it had anticipated. All that unexpected money means a rarely used law in place since 1986 will kick in, sending back some of the excess tax money to residents. Taxpayer repayments on the way: "We think the number's probably north of $2.5 billion that would be... Read more →